Page 4

WP2 DH report

Key Findings This report identifies framework conditions, i.e. existing market or regulatory arrangements that act as drivers or barriers for investment in – and the operation of – flexibility resources that can enable flexibility. The report focuses on flexibility with a time horizon of sixty minutes or more at the interface between district heating (DH) and electricity in the Nordic and Baltic countries. Initially, a broad range of flexibility resources was surveyed among the selected countries. This range was narrowed down to combined heat and power (CHP) and power-to-heat (P2H) in the form of heat pumps and electric boilers, since these, along with a collective category of general resources, appear to have the largest potential for delivering flexibility. An initial gross list of framework conditions has been refined by addition, removal and modification, based on a survey conducted among experts located in the Nordic and Baltic countries, together with a literature review of previous studies on the topic of flexibility. While the main focus in Flex4RES is flexibility and, hence, on the operational scale, this study additionally considers selected aspects of investment in flexible technologies. Among the 24 framework conditions identified, the following are considered the most important for respectively CHP, P2H and general flexibility-enabling resources: iv  CHP: Exposure to the power market, since this driver provides the best available proxy for flexibility needs  P2H: Electricity taxes and tariffs increase the cost of electricity consumption, and are barriers for the competitiveness of P2H against other heat-sources  General resources: Operational practice of heat production following heat demand, i.e. loadfollowing by heat production units rather than utilisation of heat storage, may be a barrier for flexible operation The effect of all the framework conditions has been evaluated through an explorative, qualitative survey, to determine the extent to which they impact the flexible operation of CHP, P2H and general flexibility-enabling resources. Since the DH markets differ between the countries with regard to the technology-mix and fuel distribution, the presence of certain regulatory framework conditions has greater importance in some countries than in others. The results show a large variation in regulation, but at the same time, some similarities and patterns have emerged. Below, the main conclusions of this study are presented along with the findings specific to CHP, P2H and general resources: General Conclusions and Findings  No policy for flexibility, and insufficient harmonisation of policies. None of the countries in the study have a defined set of policies to increase flexibility in the DH-electricity interface. The typical policy goals are to increase the share of renewable energy, reduce CO2 emissions, improve security of supply, or to reduce the dependency of electricity as a heating source. Some of these framework conditions may act as barriers for flexibility.  Different flexibility requirements imply different solutions. Variability from renewables might be less relevant for countries with relatively little VRE capacity (Norway, Finland and the Baltic countries). It also appears from the study that in some countries sufficient selfsupply of electricity is a more important concern than flexibility. In this case, deployment of P2H is less relevant, and CHP more relevant until VRE deployment has increased. On the


WP2 DH report
To see the actual publication please follow the link above